EXHIBIT 10K
AGREEMENT
This Agreement entered into this 3RD day of December, 1993 between NATIONAL
COMPUTER SYSTEMS, INC. ("NCS"), and PHILIP W. ARNESON ("P. Arneson"), and, to
the extent her individual interest appears herein, DELORES A. ARNESON ("D.
Arneson") (P. Arneson and D. Arneson collectively hereinafter referred to as
"Arneson") relative to NCS loans to Arneson and the employment termination
package between NCS and P. Arneson.
WHEREAS, P. Arneson's duties as Senior Vice President of NCS and President,
NCS Financial ceased effective August 4, 1993; and
WHEREAS, on April 30, 1993 the parties entered into a written agreement
clarifying and confirming the rights and obligations of the parties respective
to certain loans made by NCS to Arneson and the rights and obligations of each
of the parties thereto, which agreement by reference is made a part hereof; and
WHEREAS, NCS has guaranteed a first mortgage on the Spicer, Minnesota
homestead of Arneson, which mortgage is in the principal sum of Two Hundred
Seventy Five Thousand Dollars ($275,000); and
WHEREAS, the parties have reached an understanding respective to the
treatment of various rights, benefits and obligations of the parties relating to
P. Arneson's termination of employment.
NOW THEREFORE, in consideration of the mutual promises contained herein, NCS
and Arneson agree as follows:
1. P. Arneson represents, understands and agrees that his duties as
Senior Vice President of NCS and President, NCS Financial ceased upon the
close of business August 4, 1993.
2. The agreement entered into by and between the parties dated April
30, 1993 is incorporated herein by reference and affirmed by the parties and
remains in full force and effect, except insofar as the same is modified by
the contents hereof.
3. Since August 4, 1993, NCS has paid to P. Arneson his regular salary
of Two Hundred Thousand Dollars ($200,000) per annum, and NCS will continue
the semi-monthly installments thereof to P. Arneson or his heirs until
January 31, 1994, the close of NCS's fiscal year.
4. Beginning February 1, 1994, NCS will pay to P. Arneson or his heirs
the sum of One Hundred Thousand Dollars ($100,000) to be paid at the rate of
Sixteen Thousand Six Hundred Sixty-Six and 66/100 Dollars ($16,666.66) per
month, in semi-monthly installments, for the months of February through
July, 1994 (6 months).
For purposes of eligibility for medical, dental, and life insurance
coverage and stock option grants only, P. Arneson will be an NCS employee
during the elected payment periods.
5. Beginning February 1, 1994, NCS will deduct interest from any
amounts paid as set forth in Paragraph 4 above in accordance with the
following: calculated at a rate per annum equal to one percent (1%) in
excess of the rate of interest from time to time publicly announced by
Norwest Bank Minnesota, N.A.
The current withholding amount for interest of $1,300 per payment, or
$2,600 per month will be continued through January 31, 1994.
6. Since August 4, 1993, NCS has maintained intact all of P. Arneson's
employment benefits, and those elected by him, and will continue to maintain
the same through January 31, 1994. Commencing on February 1, 1994, NCS will
maintain the employee medical, dental and life insurance benefits as
provided to other employees until July 31, 1994, or until P. Arneson becomes
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completely covered by another plan, whichever occurs earlier. Currently
outstanding employee stock options will continue to vest until July 31,
1994. Except for the PC Quote bonus, all other employee benefits, including
but not limited to, bonuses, the outstanding Long-Term Incentive Plan award,
sick or vacation time will cease as of January 31, 1994. P. Arneson may
choose to continue the medical, dental and life coverage as personal
coverage at P. Arneson's expense for eighteen (18) months after the end of
the 1994 semi-monthly payment periods, or until covered by another plan.
7. NCS and P. Arneson agree that no allowance will be made by NCS to P.
Arneson as and for office space, secretarial services, or expense
reimbursement.
8. The present indebtedness owing by Arneson to NCS is Four Hundred
Forty Five Thousand Dollars ($445,000) which is secured by a mortgage to NCS
on the homestead of Arneson located at Spicer, Minnesota, said mortgage is
subordinated to a mortgage on said property in favor of Norwest Bank
Minnesota, N.A. in an original principal amount of Two Hundred Seventy Five
Thousand Dollars ($275,000). With respect to the Four Hundred Forty Five
Thousand Dollars ($445,000) of indebtedness, NCS will credit the avails of
any and all existing stock options to which P. Arneson would be entitled to
exercise through the end of the 1994 semi-monthly payments.
a. To the extent P. Arneson exercises any stock options pursuant to
present stock option agreements between Arneson and NCS, he will enter
into an open market sale of the subject shares of NCS stock. NCS will
then receive from and apply to Arneson's outstanding balance the
difference between the market price recognized through the open market
sale, after commissions, and the option price specified in the applicable
stock option agreement, less an amount to be reasonably determined by NCS
to cover P. Arneson's income taxes on the gain, which amount shall be
retained by P. Arneson.
b. Because of Arneson's bankruptcy and the inability to repay the
indebtedness owing by Arneson to NCS, NCS agrees that it will on January
15, 1994, forgive Two Hundred Forty-Five Thousand Dollars ($245,000) of
indebtedness of Arneson. Subsequently, in the event that the amounts or
credits realized by P. Arneson pursuant to this Agreement exceed the
remaining loan balance, NCS has the right to recover any amount so
forgiven before any remaining amounts are paid to Arneson. At all times,
the determination of the amount to be forgiven will be solely that of P.
Arneson. NCS shall neither be responsible nor liable for the payment of
any taxes incurred as the result of such debt forgiveness.
The NCS guaranty to Norwest Bank Minnesota, N.A. of the loan secured by
a first mortgage on the Arneson homestead in Spicer, Minnesota is not
modified by this Agreement.
NCS will maintain an assignment of the NCS Group Term Life Insurance
equal to the portion provided by NCS (at no cost to P. Arneson) and release
any assignment of amounts in excess thereof.
9. NCS has an investment in the publicly traded common stock of PC
Quote, Inc. NCS does hereby reaffirm an agreement heretofore made with P.
Arneson for the payment of a special bonus of Two Hundred Thousand Dollars
($200,000) if the NASDAQ quoted stock price of PC Quote, Inc. common shares
remains above Four Dollars ($4.00) per share for ninety (90) consecutive
days or is acquired by another entity for Four Dollars ($4.00) or more per
share prior to January 31, 1995; accordingly, if such event occurs, NCS will
credit Arneson's indebtedness by the amount of $200,000. Any liability for
income taxes shall be Arneson's responsibility.
10. It is understood that P. Arneson is not an agent or representative
of NCS. It is further understood that his membership on the Board of
Directors of PC Quote is in his personal and individual capacity, however,
it is his intent to cooperate fully with the designated NCS officer
responsible for this investment.
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11. In consideration of this agreement, P. Arneson, with the advice of
counsel, hereby releases and discharges NCS, its employees, directors,
officers, agents, successors, and assigns from any and all liability for
damages or claims of any kind and agrees not to institute any claim for
damages or otherwise, by charge or otherwise, nor authorize any other party,
governmental or otherwise, to institute any claim via administrative or
legal proceedings against NCS for any such claims including, but not limited
to, any claims arising under or based upon the Minnesota Human Rights Act,
Minn. Stat. SectionSection 363.01 et seq.; Title VII of the Civil Rights
Act, 42 U.S.C. SectionSection 2000e et seq.; the Age Discrimination in
Employment Act, 29 U.S.C.SectionSection 621 et seq.; or the Americans With
Disabilities Act, 42 U.S.C. SectionSection 12101 et seq.; and any contract,
quasi contract, or tort claims, whether developed or undeveloped, arising
from or related to P. Arneson's employment with NCS, and/or the cessation of
P. Arneson's employment with NCS. P. Arneson and NCS agree that, by signing
this Agreement, P. Arneson does not waive any claims arising after the
execution of this Agreement.
12. NCS does hereby release and discharge P. Arneson from any and all
liability for damages or claims arising from or related to P. Arneson's
employment with NCS except as provided in this Agreement and to the extent
of modification of the Agreement between the parties dated April 30, 1993.
13. P. Arneson agrees that he was not entitled to the payments and
benefits outlined in paragraphs 3, 4, and 6 as a result of his employment
with NCS, but that the payments and benefits are being provided as
consideration for his acceptance and execution of this Agreement.
14. P. Arneson has been informed of his right to rescind this Agreement
as far as it extends to potential claims under Minn. Stat. SectionSection
363.01 et SEQ. (prohibiting discrimination in employment) by written notice
to NCS within fifteen (15) calendar days following his execution of this
Agreement. To be effective, such written notice must either be delivered by
hand or sent by certified mail, return receipt requested, addressed to Mr.
J.W. Fenton, Jr., Secretary-Treasurer, National Computer Systems, Inc.,
11000 Prairie Lakes Drive, P.O. Box 9365, Minneapolis, MN 55440, delivered
or post-marked within such fifteen (15) day period. P. Arneson understands
that NCS will have no obligations under this Agreement in the event such
notice is timely delivered and any payments made as of that date by NCS
pursuant to paragraph 3 and 4, above, shall be immediately repaid by P.
Arneson to NCS.
15. P. Arneson has been informed of his right to revoke this Agreement
as far as it extends to potential claims under the Age Discrimination in
Employment Act, 29 U.S.C. SectionSection 621 et SEQ. by informing NCS of his
intent to revoke this Agreement within seven (7) calendar days following his
execution of this Agreement. To be effective, such written notice must
either be delivered by hand or sent by certified mail, return receipt
requested, addressed to Mr. J.W. Fenton, Jr., Secretary-Treasurer, National
Computer Systems, Inc., 11000 Prairie Lakes Drive, P.O. Box 9365,
Minneapolis, MN 55440, delivered or postmarked within such seven (7) day
period. This Agreement shall not become effective or enforceable until the
seven (7) day period has expired.
16. P. Arneson has also been informed that the terms of this Agreement
shall be open for acceptance by him for a period of twenty-one (21) days
during which time he may consider whether to accept this Agreement.
17. This Agreement constitutes a contract enforceable against either
party and shall be construed and enforced in accordance with the laws of the
State of Minnesota. Nothing contained in this Agreement is intended to
violate any applicable law. If any part of this Agreement is construed to be
in violation of a state and/or federal law, then that part shall be null and
void, but the balance of the provisions of this Agreement shall remain in
full force and effect.
18. This Agreement shall not in any way be construed as an admission by
NCS that it has acted wrongfully with respect to P. Arneson or any other
person, or that P. Arneson has any rights
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whatsoever against NCS. NCS specifically disclaims any liability to, or
wrongful acts against, P. Arneson or any other person, on the part of
itself, its directors, its employees, its representatives or its agents.
19. The terms of this Agreement shall remain strictly confidential
between the parties hereto, and shall not be disclosed to third persons
unless required by law.
20. P. Arneson hereby affirms and acknowledges that he has read the
foregoing Agreement and that he has been advised to consult with an attorney
prior to signing this Agreement. P. Arneson agrees that the provisions set
forth in this Agreement are written in language understandable to him and
further affirms that he understands the meaning of the terms of this
Agreement and their effect. P. Arneson represents that he enters into this
Agreement freely and voluntarily.
21. This Agreement may be executed by facsimile signatures which shall
be valid and enforceable as original signature.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of this 3rd day of December, 1993.
NATIONAL COMPUTER SYSTEMS, INC.
By /s/ CHARLES W. OSWALD
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Its Chairman
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/s/ PHILLIP W. ARNESON
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Philip W. Arneson
/s/ DELORES A. ARNESON
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Delores A. Arneson
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